Crime of Abuse of Trust of Company Board Director Members

Incorporated companys are responsible against obligees due to their debts with their all assests. With the principle of preserving the assets, it is aimed to secure the receivables of the creditors of the company and to prevent the transfer of the company’s assets to the outside. Accordingly, if the company officials act against the principle of protecting the company’s assets, the abuse of trust arises and the transfer of company assets to the outside is subject to actual penal sanctions.[1] In this article, we will examine the cases of abuse of trust and the elements of the crime by the members of the board of directors who are authorized by the company and the third parties who have been duly delegated.

[1] Rasim Can Çakır ,Anonim Şirkette Yönetim Kurulu Üyelerinin Güveni Kötüye Kullanma Suçundan Doğan Sorumlulukları”,p.35

Subject of the Crime

The crime of abuse of trust is one of the crimes committed against property. The concept of assets is defined as all the rights and obligations of a person that can be measured in money. However, in the justification of the article, it is stated that the subject of the crime of abuse of trust is movable and immovable properties, which shows that the crime can be committed over tangible goods.[1]

 

In the formation of the crime of abuse of trust, there must be a contractual relationship between the perpetrator and the victim, and accordingly the existence of a relationship of trust, damage to the property of the victim, and the possession of the property (possess and/or using a movable/immovable property) must be transferred to the perpetrator. Members of the company’s board of directors are in possession of the company’s assets on behalf of someone else. Third parties to whom the authority has been delegated may also acquire possession of the company’s property, depending on the nature of the delegated authority. In this case, the possession of the members of the board of directors continues, albeit indirectly. Persons who gain possession through delegation of authority may also commit the crime of abuse of trust, just like the members of the board of directors.[2]

[1] https://www.turkhukuksitesi.com/serh.php?did=1247 ,Available

[2] Rasim Can Çakır, “Anonim Şirkette Yönetim Kurulu Üyelerinin Güveni Kötüye Kullanma Suçundan Doğan Sorumlulukları”,p.63

Perpetrator

There is a legal relationship between the company and the board of directors, and a contractual legal relationship is established between the members of the board of directors and the company. The foundation of the relationship is undoubtedly based on trust.[1] The board of directors is the management and representation body of the company. It is the body that manages the internal and external relations of the company and ensures that the decisions are fulfilled. It also manages the assets of the company, which has an independent personality, legal personality before the law. This asset has been transferred to the members of the board of directors by the company, so the crime of abuse of trust may be committed by the member(s) of the company’s board of directors.

[1] Rasim Can Çakır ,Anonim Şirkette Yönetim Kurulu Üyelerinin Güveni Kötüye Kullanma Suçundan Doğan Sorumlulukları”,p.19

Victim

Since the crime of breach of trust will be committed on the company properties and there will be a trust relationship between the company officials and the company within the scope of the contractual relationship and the concept of assets, the victim of the crime will be the company with legal personality.[1] Shareholders will not be victims of this crime, since the shareholders will not be able to claim a property right on the company’s property. They can only be in the position of being harmed by the crime, by mentioning that the value of their shares is affected in proportion to the value of the company’s assets lost due to the crime of abuse of trust.

Material Element

In Article 155 of the Turkish Penal Code, instead of counting the actions of the crime one by one, it is regulated as two general headings: “making a disposition outside of the purpose of transfer of possession “or “denying the fact of transfer.” Behaviors of the perpetrator are those intended to harm the company and cause harm. In order for the crime to occur, the benefit does not need to be actually obtained or a material benefit, it can be obtained with a moral benefit.

Moral Element

The crime of breach of trust is a crime that can be committed intentionally and cannot be committed by negligence. [1] In order for the perpetrator to commit the crime of breach of trust, she must know that the property belongs to someone else and that this property is in possession based on a legal relationship. The perpetrator must have the intention to dispose of the possession other than the purpose (knowingly and willingly) of transferring the possession. The related crime can also be committed with probable intent (to act knowing the outcome beforehand but not caring about the outcomes).

[1] Rasim Can Çakır, “Anonim Şirkette Yönetim Kurulu Üyelerinin Güveni Kötüye Kullanma Suçundan Doğan Sorumlulukları”,p.113

Qualified Status

If the members of the board of directors of a joint stock company commit the crime of breach of trust, the sanction they will face will not be based on the simple form of the crime, but on the qualified form.[1] Because the relationship between the company and the members of the board of directors is not an ordinary contractual relationship of trust, but is in a position to be evaluated directly among the situations that constitute the qualified form of the crime. Since there is no professional, artistic, commercial or service relationship between the board of directors and the company, the qualified form of the crime of breach of trust by the members of the board of directors will be about the delivered goods “for whatever reason”.

[1] Rasim Can Çakır, “Anonim Şirkette Yönetim Kurulu Üyelerinin Güveni Kötüye Kullanma Suçundan Doğan Sorumlulukları”,p..65

Conclusion

The crime of abuse of trust regulated in  Article 155 of Turkish Penalty Code is a crime that can also be committed by the members of the board of directors. In cases that company officials do business and transactions contrary to the principle of protection of assets, cause bad management, loss of capital by not acting like a prudent businessman, or remain inactive in bankruptcy situations or avoid taking decisions to improve the situation, fulfilling their responsibilities in the face of the growth of company debts, acts that exceed the purpose of transfer of possession, such as carrying out wholesale sales, carrying out transactions that exceed its authority, are penalized.